In the case of a specific tax the resulting price received by producers depends on A) who pays the tax. B) the price elasticity of supply. C) the price elasticity of demand. D) All of the above. ANSWER D
Date: September 9th, 2020
Explain why short-run demand for frozen fish sticks may be more price elastic in the short run than in the long run. What will be an ideal response? ANSWER Frozen fish sticks can be stored. If frozen fish sticks go on sale you can buy large quantities and store them in your freezer. Thus, […]
Date: September 9th, 2020
To prevent obesity, the government may establish a tax on high caloric foods, such as twinkies. A twinkie tax will have the smallest impact on quantity demanded when the demand curve for twinkies is A) perfectly elastic. B) perfectly inelastic. C) more elastic than the supply curve. D) both A and B. ANSWER B […]
Date: September 9th, 2020
Which of the following is an example of an ad valorem tax? A) 5% of price B) 5% of quantity sold C) $0.50 per unit sold D) Government regulation ANSWER A
Date: September 9th, 2020
Consumers will always pay the entire amount of a specific tax whenever A) demand is perfectly inelastic. B) supply is perfectly elastic. C) Both A and B above. D) Either A or B above but not at the same time. ANSWER C
Date: September 9th, 2020
In the mid-1980s, the salaries of accounting professors with Ph.D.s increased dramatically. This resulted in an increase in enrollments in Ph.D. accounting programs. Since a Ph.D. degree in accounting may take at least four years to complete, the short-run elasticity of supply of accounting professors is A) greater than the long-run-elasticity of supply. B) less […]
Date: September 9th, 2020
Suppliers with a high supply elasticity will bear a ________ tax incidence, while suppliers with a low supply elasticity will bear a ________ tax incidence. A) lower; higher B) higher; lower C) lower or no; higher or full D) A and C ANSWER D
Date: September 9th, 2020
The duration of the “short-run” A) is one year. B) is the same for all goods. C) depends on the relative short-run elasticity of demand and supply for the good. D) depends on how long it takes consumers or firms to adjust for a particular good. ANSWER D
Date: September 9th, 2020
In the elastic portion of the supply, small changes in prices lead to ________ changes in quantity, while in the inelastic portion of the supply curve, small changes in prices lead to ________ changes in quantity. A) small; small B) large; large C) small; large D) large; small ANSWER D
Date: September 9th, 2020
Why is the supply of oil more price elastic in the long run? A) New deposits are found. B) Better extraction technology is developed. C) Firms have the ability to change the amount of all inputs. D) All of the above. ANSWER D
Date: September 9th, 2020
